The Employer-based Health Care System: Shifting Responsibilities

2007 National Health Policy ConferenceEduardo Sanchez, M.D., M.P.H.

Director, Institute for Health PolicySchool of Public Health

University of Texas Health Science Center at HoustonFebruary 12, 2007

Employer-financed Health Careand the Uninsured

– Healthcare premiums are growing more than 3 times faster than workers’ wages and 2.5 times faster than the inflation rate

– Percentage of employers providing health benefits

• 2000 69%• 2005 60%

– State of Texas employee health care costs up 53% since 2000

The Rising Spiral of Health-Care Costs

2005 Kaiser Foundation Survey

Employer-SponsoredInsurance Coverage

• 61% have insurance through their employer in the United States

• In Texas, only 53% have insurance through their employer

• 43% of companies with 50 or less employees provide insurance nationally

• In Texas, only 31% of companies with 50 or less employees provide insurance

Texas Hospital Association, April 2006

Government-SponsoredInsurance Coverage in Texas

• Medicaid

• CHIP

• County-based medical programs

• Health insurance for employees/retirees

Texas Hospital Association, April 2006

Spiral of Health Cost Increases with

High Numbers of UninsuredUninsured utilize higher

than necessary levels of care

More uninsured

More employers drop coveragebecause of high premiums

Insurance companiesRaise premiums for insured

Increased chargesto paying customers

Higheruncompensated costs

For More Information

Task Force Websitehttp://www.utsystem.edu/hea/taskforce/homepage.htm

Report Websitehttp://www.coderedtexas.org

How can the spiral be interrupted?

• Reduce the number of uninsured– Increase numbers of eligible and enrolled in

Medicaid/CHIP/state or local government programs

– Make insurance more accessible/affordable • Individually purchased• Employer provided

– Necessary but not sufficient

The Healthcare Equation is Out of Balance

Demand• Older• Heavier• More Sedentary• Un & Underinsured• Health Illiterate

Supply• Increasing Access • Increasing Workforce• System Redesign • Improving Quality of Care • Improving Technology • Improving Meds

Demand Reduction Is Imperative

Supply

• Increasing Access

• Increasing Workforce

• System Redesign

• Improving Quality of Care

• Improving Technology

• Improving Meds

Demand Reduction Is Imperative

Health PromotionHealth Promotion• Health literacy initiativesHealth literacy initiatives

• Healthier lifestylesHealthier lifestyles

• Access to care (clinical Access to care (clinical

preventive services)preventive services)

The Healthcare Equation is Out of Balance

How can the spiral be interrupted?

• Improve population health– Traditional and chronic disease-focused

public health– School-based health education and

management– Worker health promotion (worksite wellness)

How can the spiral be interrupted?

• Transform the health care delivery system– Invest in and connect to public health– Primary-care centered health system

Patient Centered Medical Home (mental/dental/medical)1. Easy access2. Continuity of care3. Comprehensive care4. Coordination of all care(Includes disease management)

TobaccoPrevention

And Cessation

ComprehensiveSchool Heath

Education

Worker and WorksiteWellness

Specialty Care

Diagnostic Testing

Hospital BasedCare

Inpatient Care

Emergency and trauma care

Primary-care Centered Health System

Public Health

Primary Care Specialty/Tertiary Care

Medical Care

Concept

= Optimal Communication (Integrated Virtual System)

Including best use of health informational technology

Two questions to ponder

• Who pays and how?– Financing

• What are we buying?– Population health